TAX TALK:What is Tax?

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TAX TALK:What is Tax?

YBTC NEWS—With a background already given on how taxes operate in Nigeria. The next question to be answered is what the true conception of tax is. In a recent conversation with a friend, he expressed how his perception of tax is like making your own child buy a bowl of Ice-cream from his money and forcefully taking 30% of it.

This period, more than ever is the best to discuss the true concept of tax and provide a clear insight into what taxes truly entail. This is because we currently live in a time when there is a need for huge awareness about a source of power for our national development which you and I have a huge role to contribute to.
Tax is a charge usually in form of money collected by the government from people or businesses for public use. It is an amount of money that a government requires people to pay according to their income, the value of their property, etc., which is then used to pay for the things done for the masses by the government.

The National Tax Policy (February 2017) which sets a wide range of parameters for taxation and other ancillary matters defines tax as any compulsory payment to the government imposed by law without direct benefit or return of value or a service whether it is called a tax or not.

In more corporate terms, tax is seen as a charge against a citizen’s property or activity as a way of supporting the government. It can also be described as a compulsory contribution to state revenue, levied by the government on either personal income or business profits or added to the cost of goods, transactions and services.

It is Important that you know that as opposed to the widely held view that taxes are a way that government forcefully steals from the masses, taxes are a tool for national development, a means of redistributing wealth and a mechanism for a holistic growth of the economy.

We urge our readers to attempt various definitions of tax based on your perspective in the comment section below. Next week, we’ll look into the historical evolution of taxation in Nigeria.

Till then, we look forward to your questions, contributions and comments!

Enjoy the rest of the Week!

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